Tweet
http://www.thisismoney.co.uk/savings...page_id=7&ct=5
Consumers will be able to claim drastically higher refunds for being overcharged on some debit and credit card transactions after European rules on electronic payments come into force here in November.
The new rules under the EU's Payment Services Directive apply to transactions where the card holder does not know what the eventual bill will be.
They could see them gain the whole bill back - not just any overpayments or disputed amounts.
The refunds will be much higher than those currently on offer under UK law for some card transactions – those requiring a temporary deposit such as car hire and hotel room payments – and could technically leave consumers with a profit, as the payouts may exceed the original loss suffered.
The changes offer additional protection to the UK's Consumer Credit Act, which only applies to credit cards and not debit cards.
They also help to simplify the complicated range of industry guidelines on debit card refunds.
The new rules – which come into force in the UK from November 1 under the EU's Payment Services Directive (PSD) - state consumers have one month to seek a full refund of monies paid for a transaction where the 'exact amount of the transaction was not specified at the point of authorisation'.
This includes direct debits that vary in amount each month, or credit or debit card transactions for hire car or hotel rooms.
For example, if you book into a hotel, hand over your credit card and the eventual bill is higher than you expected due to excessive mini-bar charges or a fee for missing bathrobes, you have four weeks to request a refund from your card provider after receipt of your credit card or bank statement.
The cardholder is allowed to seek a payout if the bill 'exceeds the amount the payer could reasonably have expected in all the circumstances', according to the rules.
These vague guidelines fall in favour of cardholders, who are increasingly being asked to prove their innocence in cases of overcharging even though the onus of proof is on the bank.
The downside is if the customer takes longer than four weeks to realise any mistake, they are not entitled to a refund. The upside is that, if they recognise it on time, the refund would be for the entire bill and not just the excess charge. So if they are overcharged by £50 on a £200 hotel bill, the entire refund will be for £250.
This will apply across the board to any transaction where the payee does not know what the eventual bill will be when handing over their card, but it has yet to be decided how the refunds will work in practice, according to a spokeswoman from the UK Payments Association.
She said: 'We will have to see how this pans out. Banks may have to pay out the full amount and seek additional repayment from the merchant, or merchants may start to charge separately for the core charge and any additional charges, to cut back on the risk of higher refunds.'
These benefits help to balance out opportunistic banks' abuse of the new EU rules, which they have been using to introduce covert extra charges on their accounts.
Is my debit or credit card payment covered?
Currently, all purchases made on a credit card are covered under Section 75 of the Consumer Credit Act, but mainly apply if the item or service is not provided, or only part provided, on transactions valued at between £100 and £30,000.
The situation is much more complicated for debit cards: if you made the purchase while your current account was in an overdraft, the purchase was technically made on credit and is covered by the Consumer Credit Act, the same as a credit card.
If your account is not in the red, then your refund will depend on whether the debit card is provided by Visa or Maestro. If it is Maestro, you are not entitled to any kind of refund, unless the goods or services were ordered from a website whose 'centre of operations' is outside the UK. Visa debit cards operate under a 'chargeback scheme'. This allows customers to a refund if goods or services are not delivered as described; although banks that provide Visa debit cards are obliged to make a refund – and you should stress that you are entitled to one even if they initially claim ignorance – it is not legally binding as in the case of a credit card. You have 120 days to make your claim.
Consumers will be able to claim drastically higher refunds for being overcharged on some debit and credit card transactions after European rules on electronic payments come into force here in November.
The new rules under the EU's Payment Services Directive apply to transactions where the card holder does not know what the eventual bill will be.
They could see them gain the whole bill back - not just any overpayments or disputed amounts.
The refunds will be much higher than those currently on offer under UK law for some card transactions – those requiring a temporary deposit such as car hire and hotel room payments – and could technically leave consumers with a profit, as the payouts may exceed the original loss suffered.
The changes offer additional protection to the UK's Consumer Credit Act, which only applies to credit cards and not debit cards.
They also help to simplify the complicated range of industry guidelines on debit card refunds.
The new rules – which come into force in the UK from November 1 under the EU's Payment Services Directive (PSD) - state consumers have one month to seek a full refund of monies paid for a transaction where the 'exact amount of the transaction was not specified at the point of authorisation'.
This includes direct debits that vary in amount each month, or credit or debit card transactions for hire car or hotel rooms.
For example, if you book into a hotel, hand over your credit card and the eventual bill is higher than you expected due to excessive mini-bar charges or a fee for missing bathrobes, you have four weeks to request a refund from your card provider after receipt of your credit card or bank statement.
The cardholder is allowed to seek a payout if the bill 'exceeds the amount the payer could reasonably have expected in all the circumstances', according to the rules.
These vague guidelines fall in favour of cardholders, who are increasingly being asked to prove their innocence in cases of overcharging even though the onus of proof is on the bank.
The downside is if the customer takes longer than four weeks to realise any mistake, they are not entitled to a refund. The upside is that, if they recognise it on time, the refund would be for the entire bill and not just the excess charge. So if they are overcharged by £50 on a £200 hotel bill, the entire refund will be for £250.
This will apply across the board to any transaction where the payee does not know what the eventual bill will be when handing over their card, but it has yet to be decided how the refunds will work in practice, according to a spokeswoman from the UK Payments Association.
She said: 'We will have to see how this pans out. Banks may have to pay out the full amount and seek additional repayment from the merchant, or merchants may start to charge separately for the core charge and any additional charges, to cut back on the risk of higher refunds.'
These benefits help to balance out opportunistic banks' abuse of the new EU rules, which they have been using to introduce covert extra charges on their accounts.
Is my debit or credit card payment covered?
Currently, all purchases made on a credit card are covered under Section 75 of the Consumer Credit Act, but mainly apply if the item or service is not provided, or only part provided, on transactions valued at between £100 and £30,000.
The situation is much more complicated for debit cards: if you made the purchase while your current account was in an overdraft, the purchase was technically made on credit and is covered by the Consumer Credit Act, the same as a credit card.
If your account is not in the red, then your refund will depend on whether the debit card is provided by Visa or Maestro. If it is Maestro, you are not entitled to any kind of refund, unless the goods or services were ordered from a website whose 'centre of operations' is outside the UK. Visa debit cards operate under a 'chargeback scheme'. This allows customers to a refund if goods or services are not delivered as described; although banks that provide Visa debit cards are obliged to make a refund – and you should stress that you are entitled to one even if they initially claim ignorance – it is not legally binding as in the case of a credit card. You have 120 days to make your claim.
Comment